Osteoarthritis (OA) affects over 46 million Americans imposing a major socio-economic burden. Currently, there are no effective medical treatments for OA. Despite its clinical significance, our knowledge of the joint development process remains limited. Synovial joint development is initiated by the formation of an interzone layer wherein joint-forming cells emerge within the segmenting chondrogenic blastema. The overall goal of this proposal is to determine the mechanisms that lead to joint interzone development, with the concept that a greater understanding of joint formation will provide the foundations to comprehend how cartilage degenerates and to develop novel therapies to treat OA. Investigations from our laboratory have revealed that TGF-2 type II receptor (T2RII) signaling is essential for the emergence of joint interzone cells. Lack of T2RII signaling in developing limbs, resulted in a lack of interphalangeal joints and an aberrant persistence of differentiated chondrocytes, as well as the absence of Noggin and Jagged-1, a Notch ligand. In mice lacking limb T2RII signaling, digital implants that gradually released Jagged-1 led to chondrocyte segmentation and emergence of interzone cells expressing joint markers, including Noggin. Noggin implants led to chondrocyte segmentation, but did not restore joint marker expression. Combining RNA laser-capture microscopy with gene-profiling analysis we have found that interzone cells express specific cell membrane-associated markers and develop in a controlled environment of cytokines, such as CCL-12, and angiogenic factors like VEGF-A, that is clearly distinct from the adjacent growth plate chondrocyte milieu. Based on the unique expression pattern of T2RII in the interzone cells and its functional role in the interzone development, we have isolated an interzone cell population from embryonic autopod mesenchyme that expresses joint specific genes, lack chondrocytic differentiation and is morphologically distinct from the cell population that lacks such markers and differentiates into chondrocytes. Based on our exciting Preliminary Data we propose the following Specific Aims: 1) to define whether activation of the Notch pathway is a mechanism by which T2RII signaling determines joint interzone formation; 2) to determine the interplay between TGF-2-induced Notch activation and Noggin in repressing joint chondrocyte differentiation; 3) to define the ontogeny of joint interzone cells throughout joint development; 4) to characterize the functional roles for CCL-12 and VEGF-A in interzone formation and the requirement for T2RII signaling in controlling their expression. To achieve these Aims, we will combine the use of mouse models, biochemistry and novel nanoparticle delivery system techniques. At the completion of the proposed studies, we will have a better understanding of how T2RII signaling initiates joint interzone formation by operating up-stream of key joint morphogenic genes and, therefore, regulating joint interzone cell survival and chondrocyte segmentation.